Orange County Register Echoes Right-Wing Media Myths To Attack $15 Minimum Wage In California
Research ››› ››› ALEX MORASH
A misleading editorial in The Orange County Register echoed discredited right-wing attacks in hopes of sinking a statewide ballot initiative, the Fair Wage Act of 2016, which would raise the California minimum wage to $15 per hour in 2021.
OC Register Claims Raising The Minimum Wage Will Kill Jobs, Increase "Welfare" Spending...
OC Register: $15 Minimum Wage Would Kill Jobs, "Dump Many Low-Wage Workers Onto Welfare." A September 7 editorial in The Orange County Register claimed that a California ballot initiative to raise the state's minimum wage from $9 to $15 an hour by 2021 would kill jobs, force employers to automate customer services, and increase public assistance spending for newly-unemployed workers:
The state's $9 hourly minimum wage rises to $10 next year. Some cities, including Los Angeles, already are boosting that to $15 or higher. The initiative would increase the state minimum wage to $15 by 2021, a 50 percent increase; then link it to the cost of living.
Spiking the base wage also would increase the use of self-service kiosks, as seen at McDonald's and other restaurants and some stores. Many of the workers laid off will go on welfare. Even the ballot summary predicts it will result in an "[i]ncrease in state and local government spending totaling billions of dollars per year."
One of the initiative's worst aspects is it ignores the great diversity of this state. Wealthy San Francisco is not the same as impoverished areas of the Inland Empire, where the cost of living also is lower. A $15 wage would decimate those areas. [The Orange County Register, 9/7/15]
... But All Available Evidence Proves The Register's Concerns Are Unfounded
Low Wages Already Cost American Taxpayers Billions Of Dollars
Labor Center: Low Wages In Fast Food Industry Alone Cost Taxpayers Nearly $7 Billion Annually. According to an October 2013 report by the University of California, Berkeley's Center for Labor Research and Education (the "Labor Center"), fast food workers cost taxpayers roughly $7 billion annually in public assistance. The bulk of public assistance is caused by low wages, which force workers to rely on Medicaid, the Children's Health Insurance Program, SNAP benefits, and the Earned Income Tax Credit. [University of California, Berkeley, Center for Labor Research and Education, 10/15/13]
Studies Indicate That Minimum Wage Increases Don't Kill Jobs, May Increase Job Growth
CEPR: Increasing The Minimum Wage Has "No Discernable Effect" On Employment. In an exhaustive February 2013 report, the Center for Economic and Policy Research (CEPR) concluded that local, state, and federal minimum wage increases had a negligible effect on job creation:
Economists have conducted hundreds of studies of the employment impact of the minimum wage. Summarizing those studies is a daunting task, but two recent meta-studies analyzing the research conducted since the early 1990s concludes that the minimum wage has little or no discernible effect on the employment prospects of low-wage workers. [Center for Economic and Policy Research, February 2013]
CEPR: Hiring Response To Minimum Wage Hikes "More Likely To Be Positive Than Negative." In a March 2011 report, CEPR concluded that minimum wage increases are "more likely" to result in job creation than job loss. According to CEPR's analysis, employment effects tended to "cluster near zero," with no major employment losses or gains tied to wage increases:
Our estimated employment responses generally cluster near zero, and are more likely to be positive than negative. Few of our point estimates are precise enough to rule out either positive or negative employment effects, but statistically significant positive employment responses outnumber statistically significant negative elasticities. [Center for Economic and Policy Research, March 2011]
IRLE: Rise In Earnings Had Zero Effect On Employment. In an April 2012 report the University of California, Berkeley's Institute for Research on Labor and Employment (IRLE) looked at the link between raising minimum wages and job creation. The IRLE found no change in job growth tied to raising minimum wages:
Summarizing to this point, we find that our border-discontinuity estimates find strong positive responses of earnings to a minimum wage increase. This rise in earnings is met with a change in the employment stock that is indistinguishable from zero. University of California, Berkeley, Institute for Research on Labor and Employment, April 2012]
Automation Could Threaten The Entire Workforce, Not Just Low Wage Workers
Experts Speculate Technological Advancement And Process Automation Could Put Any Job At Risk. Authors Erik Brynjolfsson and Andrew McAfee speculate in their e-book "Race Against the Machine" that increased computing power and technical complexity could drive economic growth while negatively affecting millions of job seekers.
It may seem paradoxical that faster progress can hurt wages and jobs for millions of people, but we argue that's what's been happening. As we'll show, computers are now doing many things that used to be the domain of people only. The pace and scale of this encroachment into human skills is relatively recent and has profound economic implications. Perhaps the most important of these is that while digital progress grows the overall economic pie, it can do so while leaving some people, or even a lot of them, worse off. [Race Against The Machine, Online excerpt, accessed 9/9/15]
Associated Press: "Recession, Tech Kill Middle-Class Jobs'. In the first of a three-part series on middle-class job losses in the wake of the Great Recession, economic and business reporters Bernard Condon and Paul Wiseman discussed at length the role automation has played in hollowing out the American job market:
Year after year, the software that runs computers and an array of other machines and devices becomes more sophisticated and powerful and capable of doing more efficiently tasks that humans have always done. [Associated Press, 1/23/13]